implications of abundant natural gas - joint global change ...€¦ · 29/04/2013 · implications...

Implications of Abundant

Natural Gas

JAE EDMONDS AND HAEWON MCJEON APRIL 2013

April 29, 2013 1

Gas and the Global Energy System

April 29, 2013 2

Gas is has been a growing component of the global energy system for some time.

Grubler et al., 2012: Chapter 1 - Energy Primer. In Global Energy Assessment - Toward a Sustainable Future.

A brief history of thinking about Natural

Gas Resources

April 29, 2013 3

In the 1990s total gas reserves were thought to be more abundant than oil, but gas

production was expected to peak and decline before mid-21st century, because gas

exploitable resources were economically limited to “conventional” resources.

Unconventional resources were thought to be too expensive ever to be relevant.

In 1997, Rogner’s work on natural resources indicated that “unconventional gas” was

abundant. But, modelers either were slow to incorporate unconventional gas (and oil)

into their thinking or priced them as more expensive than “conventional” resources.

And then a technological

revolution happened.

The natural gas revolution

4

The application of technologies for accessing “unconventional” gas shales in the United

States has dramatically increased gas production, and estimates of recoverable

resources even more.

And, dramatically reduced natural gas prices.

Source: EIA, Annual Energy Outlook 2012

Key Questions

As application of new production technology spreads beyond the United

States:

How will this change our understanding of the scale and composition

of the evolving global energy system?

How will this affect energy security and international trade?

How will this affect local and regional air quality?

What effect will this have on CO2 and other GHG emissions and the

technologies for their use in the near term and long term?

Globally and regionally

With and without emissions mitigation policies

Implications for regional air pollution

April 29, 2013 5

April 29, 2013 6

How Much Gas Is Out There?

How much natural gas is there and how much does it cost?

How much in the larger sense means resource availability

Oil, Gas and Coal

Conventional and unconventional for oil and gas

Coal is just too abundant to divide up that way.

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

oil gas coal

EJ

unconventionalresource

unconventionalreserve

conventionalresource

conventionalreserve

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

oil gas coal

EJunconventionalresource

unconventionalreserve

conventionalresource

conventionalreserve

Fossil Fuel Resources

7

How much does it cost?

To help us understand the implications of abundant and inexpensive

natural gas availability for the global energy system, we have

developed three alternative global and regional resource supply

schedules.

Gas Technology Circa 1990 (Gas Tech 1990 or GT1990) this supply

schedule reflects an understanding of gas resource availability circa

1990s.


schedule reflects an understanding of gas resource availability in the

early 2000s.


schedule assumes that advanced technologies can be successfully

deployed globally.

April 29, 2013 8

0

5

10

15

20

0 10000 20000 30000 40000

20

05

Ext

ract

ion

Co

st (

20

05

$/G

J)

Cumulative Resource (EJ)

GT1990 GT2000 GT2010

The three gas supply schedules (global)

GT1990 - Conventional Gas Resources Only, ca 1990s

GT2000 - Expensive Unconventional Gas, ca 2000s

GT2010 - Abundant and Inexpensive Gas Resources, 2010 and beyond

April 29, 2013 9

The Global Change Assessment Model

GCAM is a global integrated assessment model

GCAM links Economic, Energy, Land-use, and Climate systems

Technology-rich model

Emissions of 16 greenhouse gases and short-lived species: CO2, CH4, N2O, halocarbons, carbonaceous aerosols, reactive gases, sulfur dioxide.

Runs through 2095 in 5-year time-steps.

Dynamic Recursive

Open Source/Model and Documentation available at: http://www.globalchange.umd.edu/models/gcam/

14 Region Energy/Economy Model

151 Agriculture and Land Use Model

April 29, 2013 10

http://www.globalchange.umd.edu/models/gcam/



April 29, 2013 11

Gas and the Global Energy

System

April 29, 2013

0

50

100

150

200

250

300

350

20

05

20

10

20

15

20

20

20

25

20

30

20

35

20

40

20

45

20

50

20

55

20

60

20

65

20

70

20

75

20

80

20

85

20

90

20

95

Glo

bal

Nat

ura

l Gas

Pro

du

ctio

n (

EJ) GT2000

GT1990

Adding Abundant but EXPENSIVE

unconventional gas to Conventional gas

12

Increased late 21st century production

When gas prices were driven up past present prices

Near-term gas production and use were similar in GT1990 and GT2000.

0

50

100

150

200

250

300

350

20

05

20

10

20

15

20

20

20

25

20

30

20

35

20

40

20

45

20

50

20

55

20

60

20

65

20

70

20

75

20

80

20

85

20

90

20

95

Glo

bal

Nat

ura

l Gas

Pro

du

ctio

n (

EJ) GT2010

GT2000

0

1

2

3

4

5

6

7

8

9

20

05

20

10

20

15

20

20

20

25

20

30

20

35

20

40

20

45

20

50

20

05

$/G

J

domestic natural gas GT2000domestic natural gas GT2010LNG imports GT2000LNG imports GT2010

Abundant AND Inexpensive gas changes

our understanding of the near term

13

Abundant and inexpensive gas is introduced in North America in 2015

and globally in 2020.

The increase in natural gas production accelerates.

And lowers the price of natural gas around the world. N. Gas Price N. Gas Production

168 210 198 99

224 307 121

354 313

0

400

800

1200

2005 2050GT2000

2050GT2010

EJ/y

r

trad biomass

geothermal

solar

wind

hydro

nuclear

biomass

coal

natural gas

2050 Global Primary Energy Consumption

April 29, 2013 14

493

1,005 1,007

-50

-25

0

25

50

2015 2020 2025 2030 2035 2040 2045 2050

EJ/y

r

net changebatteryCHPsolarwindhydrogeothermalnuclearbiomassliquid fuelgascoal

Abundant and Inexpensive Gas Penetrates

Power Production

Abundant and inexpensive natural gas displaces other energy carriers

in power generation

Where it helps lower generation costs

15

Change in Fuel Mix for Power Generation resulting with Abundant and inexpensive natural gas rather than expensive unconventional gas

Global power sector consumption in 2005 = 185 EJ/yr

Global consumption in 2005 (EJ)

-40

-20

0

20

40

building industry transport electricity

113 152 88 185

EJ/y

rothers

renewables

nuclear

district heat

trad biomass

hydrogen

electricity

biomass

coal

gas

liquid fuel

2050 Global Final Energy Consumption Change

April 29, 2013 16

0

10

20

30

40

50

60

70

80

20

05

20

10

20

15

20

20

20

25

20

30

20

35

20

40

20

45

20

50

Pri

mar

y En

erg

y C

on

sum

pti

on

(EJ

/yr)

GT2000

GT2010

Former Soviet Union Global

But, a 20% increase in gas use is a much

smaller change in global energy use.

This effect is more pronounced in some regions with existing

infrastructure for natural gas based economy (e.g. FSU).

April 29, 2013 18

Gas Trade

-600 -400 -200 0 200 400 600Cumulative Natural Gas Net Export (EJ)

Former Soviet Union

Canada

Middle East

Africa

Australia_NZ

Southeast Asia

Latin America

China

Eastern Europe

Korea

India

Japan

USA

Western Europe

-600 -400 -200 0 200 400 600Cumulative Natural Gas Net Export (EJ)

Former Soviet Union

Canada

Middle East

Africa

Australia_NZ

Southeast Asia

Latin America

China

Eastern Europe

Korea

India

Japan

USA

Western Europe

April 29, 2013 19

Cumulative Natural Gas Net Export

2005-2050

Gas Tech ca. 2000 Gas Tech ca. 2010

Global natural gas consumption in 2005 = 99 EJ/yr

Cumulative USA natural gas consumption in 2005-2050 = 1200 EJ ~ 1600 EJ

April 29, 2013 20

Gas and Greenhouse

Emissions—Without Climate

Policy

Carbon and Energy

How does abundant gas affect expected greenhouse gas emissions?

CO2, and total climate forcing.

Carbon and energy

Petroleum = ~20 PgC/EJ

Coal = ~27 PgC/EJ

Natural gas = ~14 PgC/EJ

Nuclear, Solar, wind, geothermal, and other renewable energy forms

= ~0 PgC/EJ

Bioenergy is 0 net emissions for the energy sector, but indirect land use

change emissions are accounted.

Methane emissions have a (100 year) Global Warming Potential of

~25 gCO2/gCH4

12% of methane emissions was from natural gas in 2005.

Sources include: emissions from FF, e.g. coal mining, gas transmissions

& distribution, gas venting, etc., (also land use, agriculture, animal

husbandry, waste …)

April 29, 2013 21

Carbon-energy ratios in the larger economy

XGAS: Expensive unconventional gas scenario

Average carbon intensities (kgC/GJ):

Natural gas ~14 Petroleum ~20

Coal ~27

Average global 2030 ~17

Regional average carbon-energy ratios in 2010 (kgC/GJ):

Average US ~16

Average China ~22 (modern ~24)

Average India ~16 (modern ~20)

Average W. Europe ~15

Average Africa ~11 (modern ~15)

April 29, 2013 22

0

5

10

15

202

00

5

20

10

20

15

20

20

20

25

20

30

20

35

20

40

20

45

20

50

GtC

GT2010

CO2 Emissions: Abundant and Inexpensive

versus Expensive Unconventional Gas

April 29, 2013 23

0

5

10

15

202

00

5

20

10

20

15

20

20

20

25

20

30

20

35

20

40

20

45

20

50

GtC

GT2000

GT2010

CO2 Emissions: Abundant and Inexpensive


• Virtually no change in Fossil Fuel CO2 emissions.

• Slightly higher in the early years due to increased energy consumption.

• Slightly lower in the later years due to crowding out coal.

April 29, 2013 24

-2

-1

0

1

2

3

4

5

6

2005 2050GT2000

2050GT2010

Rad

iati

ve F

orc

ing

(Wm

-2)

250

350

450

550

650750850

Co

nce

ntr

atio

n

(pp

mv

CO

2-e

q)

Radiative forcing increases slightly.

Reduced SO2 from coal burning reduce cooling effect.

Increased fugitive methane emissions from natural gas extraction.

Smaller countervailing effect of reduced fugitive methane emissions

from coal mining.

Reduced Black Carbon emissions from coal burning.

Slightly reduced CO2 emissions from reduced biomass land use

change emissions.

Climate Forcing: Abundant and Inexpensive


April 29, 2013 25

Radiative Forcing Radiative Forcing Difference

CO2

CH4

N2O

Other Kyoto Gases

SO2

All Other Gases

Net Total

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

Rad

iati

ve F

orc

ing

Dif

fere

nce

Why did CO2 emissions not decline?

Two effects of abundant and inexpensive “unconventional”

gas

1. Carbon-intensity reduction effect—on average more gas

means a lower carbon-energy ratio

2. Demand expansion effect—on average energy is less

expensive, so people use more.

These two effects roughly cancel—at a global scale.

April 29, 2013 26

-100

-80

-60

-40

-20

0

20

40

60

Afr

ica

Au

stra

lia_N

Z

Can

ada

Ch

ina

East

ern

Eu

rop

e

Form

er S

ovi

et U

nio

n

Ind

ia

Jap

an

Ko

rea

Lati

n A

mer

ica

Mid

dle

Eas

t

Sou

thea

st A

sia

USA

Wes

tern

Eu

rop

e

ΔMtC 2030

2050

Regional changes in carbon emissions

27 April 29, 2013

-80

-40

0

40

80

20

15

20

20

20

25

20

30

20

35

20

40

20

45

20

50

EJ/y

r

trad biomassgeothermalsolarwindhydronuclearbiomasscoalnatural gasoilnet change

Global Primary Energy Consumption Change

April 29, 2013 28

In general changes are

modest

Global Total ≈ 493 EJ/yr in 2005

-20

-10

0

10

20

20

15

20

20

20

25

20

30

20

35

20

40

20

45

20

50

EJ/y

r

trad biomassgeothermalsolarwindhydronuclearbiomasscoalnatural gasoilnet change -8

-4

0

4

8

20

15

20

20

20

25

20

30

20

35

20

40

20

45

20

50

EJ/y

r


-80

-40

0

40

80

20

15

20

20

20

25

20

30

20

35

20

40

20

45

20

50

EJ/y

rtrad biomassgeothermalsolarwindhydronuclearbiomasscoalnatural gasoilnet change -20

-10

0

10

20

20

15

20

20

20

25

20

30

20

35

20

40

20

45

20

50

EJ/y

r


Global

USA

China

Africa

29

April 29, 2013 30

Gas and Emissions Mitigation

Abundant natural gas and greenhouse

gas emissions mitigation

How is that understanding different compared with our earlier

understanding?

Which policy?—Stabilization of greenhouse gas concentrations (the

goal of the Framework Convention on Climate Change)

Analysis assumptions:

Ambitious policy goal: 450 ppm CO2-e (2.6 Wm-2) in 2100

Idealized policy

All regions face a common carbon tax

All sectors face a common carbon tax

The carbon tax rises over time at the idealized “Hotelling” rate.

Full suite of technologies available

Nuclear, CO2 capture and storage (CCS), bioenergy, forest sequestration,

renewable energy, energy efficiency

April 29, 2013 31

0

50

100

150

200

250

300

350

400

2005 2015 2025 2035 2045

Pri

mar

y En

erg

y C

on

sum

pti

on

(EJ

/yr)

0

50

100

150

200

250

300

350

400

2005 2015 2025 2035 2045

Pri

mar

y En

erg

y C

on

sum

pti

on

(EJ

/yr)

0

50

100

150

200

250

300

350

400

2005 2015 2025 2035 2045

Pri

mar

y En

erg

y C

on

sum

pti

on

(EJ

/yr)

GT2000

GT2000 450 CO2e

GT2010

GT2010 450 CO2e

Abundant and inexpensive gas

increases gas usage in climate

mitigation scenarios.

Larger than in the expensive gas

reference scenario.

But, not as large as in the Abundant

and inexpensive gas reference

scenario—i.e. climate mitigation does

not enhance gas usage.

Fossil Fuel Consumption

Abundant and inexpensive

gas reduces oil demands,

but not much.

Climate policy reduces the

demand for oil, but also, not

much.

Abundant and inexpensive

gas reduces coal

demands, but not much.

Climate policy reduces the

demand for coal use, a lot.

OIL COAL GAS

April 29, 2013 35

Carbon Price

0

20

40

60

80

100

120

2005201020152020202520302035204020452050

20

05

$/t

CO

2

GT2000 450 CO2e

GT2010 450 CO2e

Summary

Natural gas has been increasing its market share for decades

Technologies that make commercially available gas more abundant

and less expensive accelerate this trend

This has major implications for competition among all primary energy

sources; for energy production, transformation, distribution and end

use; energy security; local and regional air pollution; investments in

facilities and infrastructure; supply and value chain interactions within

and among sectors and regions and trade

Gas displaces other fuels but does not significantly alter the overall

scale of the global energy system through 2050

Gas trade patterns change significantly, e.g. the USA becomes a small

net exporter

Availability of abundant, less expensive gas through 2050 does not

significantly change

Global fossil fuel CO2 emissions or total radiative forcing, or

The carbon price required in an idealized mitigation scenario

April 29, 2013 37

END

implications of abundant natural gas - joint global change ...€¦ · 29/04/2013 · implications...

Documents